Well, Enigma seems to think something is only worth the resources it requires to obtain it.

Well, if it would cost me 4 bitcoins worth of resources to mine 1 bitcoin, then I'd have been better off using those resources to buy 4 bitcoins. I don't know why anyone would choose to mine bitcoins at a loss if you can purchase them cheaper. Rational people would always make this choice, until the cost of a bitcoin is greater than the cost to mine it yourself.

Well, Enigma seems to think something is only worth the resources it requires to obtain it.

Well, if it would cost me 4 bitcoins worth of resources to mine 1 bitcoin, then I'd have been better off using those resources to buy 4 bitcoins. I don't know why anyone would choose to mine bitcoins at a loss if you can purchase them cheaper. Rational people would always make this choice, until the cost of a bitcoin is greater than the cost to mine it yourself.

It makes me wonder if the mining of bitcoins won't just cease. No more bitcoins as it is too expensive to mine them. You have to assume most of the bitcoins that will ever be are already owned by other people. So where do you do from there? Somewhere else I suspect.

I am struggling to think of a more environmentally wasteful currency. One that uses energy to perform calculations that do nothing. If they were solving folding problems for cancer research or solving genome problems I could see the point. Why not just take a ticket and wait for your bitcoin based on time?

I kind of get it, since crunching the algorithm gives the system a very measurable demand for the currency to base its value on. I am not sure if it is more or less wasteful than traditional methods of currency production.

Or at least the FV of 1 bitcoin is worth more than the cost to mine 1 bitcoin.

No. As long as it's more expensive to mine a bitcoin than it is to buy one, rational people will choose to buy the bitcoin, rather than produce it themselves.

No. If you spend $400 to mine a bitcoin that you know will be worth $450 in one year, and your $400, invested will only garner $449.99, then you obviously should mine the bitcoin. It's called Future Value and is an extremely important concept when evaluating commodities and currencies.

Mining a bitcoin isn't as simple as "pay this, receive this." There is no amazon.com selling bitcoin miners with free 2-day shipping. Good luck trying to buy one, much less having it to your doorstep and mining with it. A lot of sites claiming "cloud hashing" are just money grabs.

Or at least the FV of 1 bitcoin is worth more than the cost to mine 1 bitcoin.

No. As long as it's more expensive to mine a bitcoin than it is to buy one, rational people will choose to buy the bitcoin, rather than produce it themselves.

No. If you spend $400 to mine a bitcoin that you know will be worth $450 in one year, and your $400, invested will only garner $449.99, then you obviously should mine the bitcoin. It's called Future Value and is an extremely important concept when evaluating commodities and currencies.

But if you buy the bitcoin for $100 you can get 4 and in a year they'll be worth $1,800 and you didn't have to buy a mining rig.

Or at least the FV of 1 bitcoin is worth more than the cost to mine 1 bitcoin.

No. As long as it's more expensive to mine a bitcoin than it is to buy one, rational people will choose to buy the bitcoin, rather than produce it themselves.

No. If you spend $400 to mine a bitcoin that you know will be worth $450 in one year, and your $400, invested will only garner $449.99, then you obviously should mine the bitcoin. It's called Future Value and is an extremely important concept when evaluating commodities and currencies.

But right now, I could spend $400, and get 4x the number of bitcoins without mining anything, as in this example, you can buy a bitcoin for $100. So now, instead of spending $400 to make $50, you're spending $400 to buy 4 coins, and making $1,400 ($350 x 4). The FV is only important in your decision to obtain bitcoins, not in the method you should go about getting them.

Yes, but mining is necessary if the currency is going to proliferate so at some point the value proposition of mining must be considered.

I've considered the value proposition of mining. Right now, if Rushy is correct with his numbers, it's 4x more expensive to produce bitcoins yourself than to purchase them. With this information, it's more rational to simply buy bitcoins rather than spend money mining them, and it will continue to be the case that nobody should mine them, until the cost to purchase them exceeds the cost to produce them.

Well I just looked at the KnCMiner Neptune that is supposed to come out soon (maybe it already has) and it looks promising. At 3TH/s it should be able to mine one block every 1.4 days. Using 3kW (est.) of power means that it would consume 2160 kWh/month and at 0.109$/kWh you are talking about $250/month to run it while earning 535 bitcoins a month on average. So unless there is something profoundly wrong with my calculations, or this miner is a bunch of BS, it already is viable.

Well I just looked at the KnCMiner Neptune that is supposed to come out soon (maybe it already has) and it looks promising. At 3TH/s it should be able to mine one block every 1.4 days. Using 3kW (est.) of power means that it would consume 2160 kWh/month and at 0.109$/kWh you are talking about $250/month to run it while earning 535 bitcoins a month on average. So unless there is something profoundly wrong with my calculations, or this miner is a bunch of BS, it already is viable.

In this case, a bitcoin would cost $0.47 to produce, plus whatever the cost of this Neptune thing is over its useful life, which if Moore's Law is correct should be about 2 years. The only thing I saw was that these things cost $10,000, so $420/mo, which would put the cost of production at $1.25/bitcoin. In which case, why would anyone pay the $800/bitcoin it costs now, when you can produce your own for $1.25. We now have a lower limit of cost at $1.25 per coin, which means that the difference between the cost to produce, and the cost to buy is a 640 times difference. Nobody in their right mind would pay that kind of markup, and if you're spending $3,200 to produce a bitcoin, as Rushy would have us believe, while someone else is spending $1.25 to produce the same product, you'd be better off putting your resources to something else.

Yeah I totally agree. I was shocked when these numbers came up which makes me think that I am missing a piece of information because if Rushy seems to know his bitcoins. Maybe he can weigh in about this miner?

In this case, a bitcoin would cost $0.47 to produce, plus whatever the cost of this Neptune thing is over its useful life, which if Moore's Law is correct should be about 2 years. The only thing I saw was that these things cost $10,000, so $420/mo, which would put the cost of production at $1.25/bitcoin. In which case, why would anyone pay the $800/bitcoin it costs now, when you can produce your own for $1.25. We now have a lower limit of cost at $1.25 per coin, which means that the difference between the cost to produce, and the cost to buy is a 640 times difference. Nobody in their right mind would pay that kind of markup, and if you're spending $3,200 to produce a bitcoin, as Rushy would have us believe, while someone else is spending $1.25 to produce the same product, you'd be better off putting your resources to something else.

You seem to be doing a great job of confusing yourself, so I'm going to make this simple.

1. ASIC miners make a shitload of money. They are literally money printers and people are paying through the nose to grab one.2. The company doesn't mine with their own miners because that is called "selfish mining" and it theoretically causes you to lose more money than you make because you damage the Bitcoin network. Butterfly Labs tried doing that and most of the community ignores them now. Unfortunately they continue to catch newbs in their marketing trap. 3. "as Rushy would have us believe" is the dumbest thing I've ever heard. You're making shit up and putting words in my mouth. I'm starting to think you don't even read my posts.